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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
AMENDMENT NO. 2
TO
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): December 31, 2003
Commission File Number: 0-12742
SPIRE CORPORATION
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(Name of small business issuer as specified in its charter)
MASSACHUSETTS 04-2457335
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(State or other jurisdiction of (I.R.S. Employer
organization or incorporation) Identification Number)
ONE PATRIOTS PARK
BEDFORD, MASSACHUSETTS 01730-2396
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(Address of principal executive offices)
781-275-6000
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(Registrant's telephone number)
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EXPLANATORY NOTE
This Amendment No. 2 to Current Report on Form 8-K is being filed to
amend and restate the disclosure provided in Item 4 of this Form 8-K, as
amended, dated December 31, 2003.
ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT.
On December 31, 2003, Spire Corporation (the "Company") dismissed KPMG
LLP ("KPMG") as its principal independent accountant. However, KPMG continued to
be engaged by the Company to complete the audit of the balance sheets of
Bandwidth Semiconductors, LLC ("Bandwidth") (acquired by the Company on May 23,
2003) as of December 31, 2002 and 2001, and the related statements of
operations, stockholders' equity, and cash flows for the years ended December
31, 2002 and 2001. The decision to change principal independent accountants was
approved by the Company's Audit Committee. On January 7, 2004, the Company
engaged Vitale, Caturano & Company, P.C. ("VCC") as its new principal
independent accountant. The engagement of VCC was approved by the Company's
Audit Committee. For further information regarding the engagement of VCC as the
Company's new principal independent accountant, see the Company's Current Report
on Form 8-K, dated January 7, 2004, filed with the Securities and Exchange
Commission on January 8, 2004.
On May 7, 2004, the Company filed a Current Report on Form 8-K/A to file
the financial statements and pro forma financial information required with
respect to the acquisition of Bandwidth. Accordingly, as of such date, KPMG is
no longer acting as an independent accountant with respect to the Company or any
of its subsidiaries.
KPMG's report on the financial statements of the Company for each of the
years ended December 31, 2001 and 2002 did not contain an adverse opinion or a
disclaimer of opinion and were not modified as to uncertainty, audit scope or
accounting principles.
During the Company's fiscal years ended December 31, 2002 and 2001 and
the subsequent period through May 7, 2004, there were no disagreements with KPMG
on any matter of accounting principles or practices, financial statement
disclosure, or auditing scope or procedure, which disagreements, if not resolved
to KPMG's satisfaction, would have caused KPMG to make reference to the subject
matter of the disagreement(s) in connection with its reports on the Company's
financial statements.
During the Company's fiscal years ended December 31, 2002 and 2001 and
the subsequent period through May 7, 2004, there were no reportable events (as
described in Item 304(a)(1)(iv)(B) of Regulation S-B) with respect to the
Company's relationship with KPMG, except as follows:
(i) In connection with its audit of the Company's financial statements
for the period ended December 31, 2002, KPMG advised the Audit Committee
by a letter dated April 30, 2003 that it noted certain matters involving
internal control and its operation that it considered to be reportable
conditions under standards established by the American Institute of
Certified Public Accountants (the "AICPA"). Reportable conditions are
matters coming to an independent auditors' attention that, in their
judgment, relate to significant deficiencies in the design or operation
of internal control and could adversely affect the organization's
ability to record, process, summarize, and report financial data
consistent with the assertions of management in the financial
statements. KPMG advised the Audit Committee that it considered the
following to constitute a reportable condition: During 2002, the Company
did not follow its accounting policy on revenue recognition for its
business to install solar electric systems (its solar systems division).
KPMG advised the Audit Committee that (a) it did not believe that this
condition constituted a material weakness and (b) this condition was
considered in determining the nature, timing and extent of the audit
tests applied in its audit of the Company's 2002 financial statements,
and that the condition did not affect KPMG's report dated March 20, 2003
with respect to these financial statements. The Audit Committee
discussed the subject matter of this reportable event with KPMG.
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The Company believes that this reportable condition did not
exist prior or subsequent to fiscal year 2002. Furthermore, the Company
concluded that this reportable condition did not have a material effect
on the Company's quarterly financial statements for 2002.
(ii) In connection with its review of the Company's Form 10-QSB for the
quarter ended June 30, 2003, KPMG advised the Audit Committee and
management by a letter dated December 24, 2003 that it noted certain
matters involving internal control and its operation that it considered
to be material weaknesses that constituted reportable conditions under
standards established by the AICPA. Under those standards, a material
weakness is a reportable condition in which the design or operation of
one or more internal control components does not reduce to a relatively
low level the risk that errors or fraud in amounts that would be
material in relation to the financial statements being audited may occur
and not be detected within a timely period by employees in the normal
course of performing their assigned functions. KPMG advised management
and the Audit Committee that it considered the following to constitute
material weaknesses in internal control and operations: the Company's
failure to adequately staff its finance group with the appropriate level
of experience to effectively control the increased level of transaction
activity, address the complex accounting matters and manage the
increased financial reporting complexities resulting from, among other
things, the acquisition of Bandwidth on May 23, 2003 and the
implementation of a new financial reporting system during the second
quarter of 2003. The Audit Committee discussed the subject matter of
this reportable event with KPMG.
The Company has made and is continuing to make changes in its controls
and procedures, including its internal control over financial reporting, aimed
at enhancing their effectiveness and ensuring that the Company's systems evolve
with, and meet the needs of, the Company's business. The Company is also
continually striving to improve its management and operational efficiency and
the Company expects that its efforts in that regard will from time to time
directly or indirectly affect the Company's controls and procedures, including
its internal control over financial reporting. For example, the Company has
recently added to its accounting staff and expects to hire additional
professionals and the Company has arranged for additional compliance training
for its staff. On April 1, 2004, the Company hired a permanent chief financial
officer with the appropriate experience and background to manage the diverse and
complex financial issues which may arise in the Company's business. The Company
is also continuing its efforts to upgrade its information technology
capabilities and has completed the implementation of a common accounting system
at all of its business units.
The Company authorized KPMG to respond fully to the inquiries of the
successor accountant concerning the subject matter of the reportable conditions
and material weaknesses cited by KPMG.
The Company has provided KPMG with a copy of the disclosures it is
making in this report and has requested KPMG to furnish the Company with a
letter addressed to the Securities and Exchange Commission stating whether it
agrees with the statements made by the Company in this report and, if not,
stating the respects in which it does not agree. A copy of that letter is filed
as Exhibit 16.1 to this Report.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(c) Exhibits.
Exhibit No. Description
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16.1 Letter from KPMG LLP to the Securities and Exchange
Commission dated May 14, 2004.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
SPIRE CORPORATION
Date: May 14, 2004 By: /s/ Roger G. Little
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Roger G. Little
President, Chief Executive Officer
and Chairman of the Board
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EXHIBIT INDEX
Exhibit Description
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16.1 Letter from KPMG LLP to the Securities and Exchange
Commission dated May 14, 2004.
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